Barloworld Logistics is planning to expand its current supply chain solutions from UAE to the GCC and Africa capitalising on the ongoing transformation of the region. According to Ernst and Young’s 2012 Rapid Growth Markets (RGM) Forecast, exports fromthe Middle East and Africa are predicted to grow by more than 12 per cent over the next ten years.

Similarly, the 2012 report on African supply chain foresight noted great potential for the African continent as a logistics market. This is due to the fast growth of GDP in some African regions and increased demand for cargo services across most industry sectors. As a result the African logistics market is set to grow over the next five years.

Africa, in particular, has emerged as a key supplier of the resources and raw materials that are powering the growth of emerging economies such as China, India and Russia; a trend that is expected to significantly influence the future demand for logistics and supply chain solutions, with Africa and the GCC as a hub. Many of the products driving the demand for cargo services are derived from natural resources from Africa’s well-known industries of mining, chemicals and agriculture.

Frank Courtney, Barloworld Logistics’ Chief Executive for EMEA region, said: “Africa’s positioning as a strategic target market makes it imperative to have a strong and well-established logistics sector to supplement the desired growth. According to the African Supply Chain Foresight survey, 58% of respondents are planning to expand their sales into Africa and 44 per cent of respondents are planning to sell through partners. The study also found that 75% of respondents find it difficult to find reliable service providers and partners in Africa. As an African Supply Chain company, Barloworld Logistics is committed to addressing this gap by further expanding its presence across strategic locations in Africa and the GCC. We have in-depth knowledge of the African market, being a homegrown company established in South Africa and this gives us a competitive advantage to better understand and cater to the distinct requirements of domestic markets.”

“With the presence of state-of-the-art logistics facilities, free zones, dedicated sea ports and airports; we believe that the GCC is well-positioned as a distribution hub to serve Africa. Barloworld Logistics is focusing on Africa and the Middle East, particularly the GCC region with a range of smart supply chain solutions,” added Courtney.

According to the survey, South Africa, Angola, Nigeria, Kenya and Egypt represent the largest trading economies in the African trade zones with annual GDP growth rate ranging from 5 per cent to 9 per cent. These countries, which currently serve as economic drivers within their relative trade zones, are expected to generate strong interest for trade and investment from the BRIC (Brazil, Russia, India, China,) countries.

Ethiopia, Tanzania, Mozambique and Namibia are recognized as future economic growth drivers in the African region while Sudan, DRC, Angola and Nigeria are also stepping up trade and investment activities, creating long-term prospects for logistics and supply chain management services across Africa.

The 2012 African supply chain foresight survey report shows that China allocates up to 33% of its total outbound investments for Africa on infrastructure development. Other Chinese investment flows involve the mining sector (40.74%), business services (21.58%) and finance (16.4%).

“We see the above trends in favour of both the African and Middle East logistics sector, where the GCC serves as a hub. Our immediate plans therefore are to offer reliable logistics and freight forwarding solutions to GCC companies doing business with Africa and the Middle East,” concluded Courtney.

Joumana Saad

Before joining SME Advisor, I worked as a producer/reporter for Forbes Media in New York. I obtained a Bachelor’s degree in Journalism and International Studies at the University of South Florida in the US. I am currently in Dubai working as Sub-Editor for SME Advisor Middle East, which is a business magazine published by CPI. You can follow me on Twitter: @joumanasaad or @SMEadvisorME and (Joumana Saad) or (SME Advisor) on LinkedIn.

SME Advisor Middle East is aimed at business owners and senior executives across the GCC. Armed with practical advice, it has been highlighting key business issues for the small and medium enterprise segment since its launch in 2005.